Facebook advertisers lose bid for class status

Jonathan Stempel

3 IN. DI LETTURA

(Reuters) - Facebook Inc, which runs the world’s largest social networking website, won a court ruling on Friday rejecting a bid by thousands of advertisers to sue the company as a group for overcharging them.

A Facebook logo is displayed on a Kodak photo kiosk during the 2012 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 11, 2012. REUTERS/Steve Marcus

U.S. District Judge Phyllis Hamilton in Oakland, California, denied the advertisers’ request for class-action status, saying they failed to show they had enough in common to sue for breach of contract and violating California’s unfair competition law.

“The court is persuaded by Facebook’s argument that plaintiffs have not shown that they have a viable method for proving each class member’s recovery,” Hamilton wrote. “The need to determine both liability and damages on an individualized basis makes this case inappropriate for class treatment.”

Jonathan Shub, a lawyer for the advertisers, declined to comment. Facebook spokesman Andrew Noyes said the company is reviewing the decision.

Facebook is expected this year to conduct perhaps the most anticipated U.S. initial public offering ever. The Menlo Park, California-based company is valued at $95.8 billion, according to SharesPost Inc, which tracks valuations of private companies.

In their 2009 lawsuit, the advertisers accused Facebook of overcharging them on their “cost-per-click” contracts, under which they paid fees each time users clicked their ads.

According to the advertisers, Facebook improperly imposed charges for nonexistent clicks, for clicked ads that never opened, for clicks caused by server problems, and for accidental multiple clicks by individual users, among other types of clicks.